What to buy?

Hi- I'm another newbie looking for advice on what to buy. This will be our family's first DSLR camera but we are interested in taking up photography as a hobby. We started looking at the Canon 7D because of it's spectacular reputation and we figured that we could "grow into it" as we learn more. After reading about the types of lenses we would need to buy to really embrace the power of the camera, I'm feeling some sticker-shock and want to avoid making a stupid decision since we aren't professionals. We aren't ruling out the 7D, just looking for some advice.

Budget: Somewhat flexible, but would like to stay around $2,000 for camera and lens(es).
Photography: Candid photography of family/children events, portraits, nature, etc.
Skill: Zero at the moment, but plan to take the new camera and study books/articles intensely and practice practice practice.

Any help??

Buy Understanding Exposure by Brian Peterson.

In terms of cameras, if Isuggest anything but a 7d then the 7d owners will behead me.

Do you need video?

With a 2k budget you may want to stretch it and not spend the majority of it on the body. A 50d or even a 40d would serve you well to start. You cab get a 40d for around $600 which would leave you plenty of money for lenses.

Tamron 17-50 - $400
Sigma 30 1.4 - $350
Canon 70-200 f4L - $550

50d - $900
Canon 15-85 IS - $600
Canon 70-200/4 - $550
YN-465 Flash - $70

40D $600
Tamron 17-50 - $400
Canon 55-250 - $200
Sigma 30 1.4 - $350
Canon 430 EX II Flash - $250

Thanks CosmoKid! That's some good info I wouldn't say that video is a "need", but I sure would enjoy having it since I don't plan on lugging around a heavy camera, several lenses, AND a video camera, you know? It would be one less thing to worry about....

There's always the Canon T1i if you want video. I much prefer the larger bodies with more accessable controls, but otherwise it's a very nice camera. If you're willing to sacrifice the video, I've been extremely happy the 40D I bought used from Adorama Camera (or maybe it was B&H). It's a "older" body, but even though I have a 5D MII as well, the 40D is really my workhorse. The 30D and even the 20D are still good cameras as well.

One last word on the video. Make sure you understand what you're getting into with the video on a DSLR. It's a very powerful tool and in many ways much more versatile than your normal camcorder, but it's very different to use. If you haven't already, get your hands on a 7D/T1i/5dMII (the video is similar on all of them) and play around with it for a bit. I know I'm definitely not yet very comfortable shooting video on my 5D, but then again, I just got the camera a couple weeks ago, and I'm really not into shooting video, so I don't get much practice.